The number of AIB shares set aside for retail investors as part of the upcoming IPO is yet to be determined and will be decided on the basis of overall demand.

A Department of Finance spokeswoman said Finance Minister Michael Noonan would make the decision after the offer was closed.

"This is in line with Department of Finance's approach, which is focused on providing access to the IPO for those members of the public who wish to participate, rather than proactively promoting or targeting retail participation," the spokeswoman added. The minimum order for retail investors will be €10,000, and they will buy shares on the same terms as institutions.

Noonan is believed to be close to pulling the trigger on the sale of up to a quarter of the 99.9pc State-owned bank, as the State seeks to recoup some of the €21bn pumped into the bank by taxpayers to keep it afloat.

He has previously signalled he would float the bank in one of two windows, one in May/June and another in the autumn.

"AIB is well-placed to expect a high level of demand from both retail and institutional investors," said Darren McKinley, senior equity analyst at Merrion Capital. "The biggest challenge here is the Government getting the pricing right."

The Government will be able to buy 9.99pc of the bank's shares at twice the IPO price, between the first and 10th anniversary of the IPO.

That means it will be able to recoup a greater return if the share price goes beyond twice the IPO price.

The Government is also warning potential retail investors to take independent advice before buying shares issued under the IPO.

Small investors have been warned to stop buying AIB shares that are in circulation - the so-called "eejit trade".

Stockbrokers have warned that the current share price does not reflect the value of the bank, with only a tiny percentage of its shares trading.

The share price has soared to €8.60 from around €5 a month ago, indicating the bank is worth more than €23bn. That is more than twice the value put on it by the National Treasury Management Agency at the end of last year.

Stephen Hall, a banking analyst with Cantor Fitzgerald in Dublin, said recently that the current share price "is certainly not a reflection of the underlying dynamics of the business of the bank".

He said the share price on flotation was unlikely to be as high as it was now.